The Reserve Bank of India (RBI) today cut the repo rate by 50 bps to 8%. It left the CRR unchanged at 4.75%. Loans are likely to get cheaper.

Even though the cut was expected, the cut was expected to be 25bps. The cut of 50 bps has come as a surprise. The Reserve Bank of India has cut the rates for the first time in three years. Since March 2010, the RBI had increased the interest rates thirteen times.

Bankers are likely to pass on the 0.50 per cent cut to borrowers. So home loans, car loans, personal loans could get cheaper to that extent.